Oct 30 Reuters Western Digital said on Monday it would spin off its flash memory business that has been grappling with a supply glut after talks of merging the unit with Japan39;s Kioxia stalled.

The split will leave the data storage products maker with its traditional harddisk drive business and create two publicly traded firms, giving into demands from activist investor Elliott.

Western Digital shares rose 10 on the news. Elliott said in a statement it supports the split.

The move clears years of uncertainty over Western Digital39;s flash memory unit that was built through its 19 billion purchase of SanDisk in 2016 and caters to the smartphone and computer industries.

Demand for flash chips has slumped after the pandemic, leaving the market awash in supply and increasing the pressure on chipmakers to consolidate.

Since 2021, Western Digital and its manufacturing partner Kioxia have been in talks for a merger that would create a company that controls a third of the global NAND flash market.

The latest attempt at the deal stalled last week after opposition from Kioxia investor SK Hynix, which is a major memory chip maker and rival to both firms, sources told Reuters.

Given current constraints, it has become clearer … that delivering a standalone separation is the right next step in the evolution of Western Digital, CEO David Goeckeler said on Monday.

The company, which also reported quarterly results, did not give more details on the talks with Kioxia during…